FINANCIAL MANAGEMENT

Course Outline
Course Objectives:
The feld of fnance is broad and dynamic. It directly afects the lives of
every person , every organiation!private, public, governmental and
non"governmental, business and not"for" proft#. This subject is the core
course for all the business education degrees such as $%, $&',$&(,
$.com, $%c.!'ccounting ) *inance#,$%c!e"commerce# C', IC$',
'CC', &%!commerce, 'ccounting, fnance, business administration
etc.#, &.Com. and a host of professional degrees+certifcate courses in
the feld.
*inancial management is concerned ,ith the duties of the fnancial
manager in thebusiness frm ,here he manages the fnancial afairs of
the business. The tas-s performed by a fnancial manager include
planning, e.tending credit to customers, evaluating proposed large
e.penditures, and raising money to fund the frm/ operations.
In recent years, the changing economic and regulatory environments
have increased the importance and thus comple.ity of the fnancial
management. It ,as need of the time to revise+update the course
contents of the subject so as to serve the follo,ing objectives:
" To ac0uaint the students about 1ros and cons of *inancial planning
and analysis
" To inculcate the ,ays and means ho, to manage the operating
fnancial activities of
an organiation e2ciently and in the most cost efective manner.
" To e0uip the students ,ith the tools and techni0ues for appraising
various
investment proposals.
"To give a fair enough -no,ledge in respect of assessing ris- in the
investment
underta-ings and ,ays to mitigate the ris-s up to the ma.imum level.
"To fnd the best possible fnancing mi. to fnance the proposed
investments.
"To e.plore ,ays other than ban- loans for fnancing capital
investments.
Topic
1
An overview of Financial Management
Types of Finance
*inance ,ithin the organiation
*orms of business organiation
Types of business organiations
*inancial management functions
$anagerial goals of the frm
Corporate and personal ta.
*inancial environment and the ir role in the
frm

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Topic
2
Financial lanning an! Anal"#i#
Financial Statement Analysis
Income statement
&alance sheet
Cash 3o, statement
4atio analysis
*orecasting *inancial %tatements
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Topic
3
$al%ation
The Time Value of Money and its
Application Book
Term structure of interest rates
5ominal and (fective Interest rate
'mortiation of loan
The Valuation of long-term Securities
6iferent valuation concepts
&ond 7aluation
1referred stoc- valuation
Common stoc- valuation
4ates of 4eturn !or 8ields#
1
Topic
&
'orking Capital Management
Working Capital terminologies and
issues
Operating cycle
Cash conversion cycle
'lternative current assets
Cash and Marketable Securities
Management
$otives for holding cash
%peeding up cash receipts
%lo,ing 6o,n Cash payouts
(lectronic Commerce
Investment in mar-etable securities
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Topic
9
Accounts Receiable and !nentory Management
Credit evaluation criteria
*ive C:s of credit
Credit policies
Collection polices
'ging of account receivable
Financing in current assets
%pontaneous fnancing
5egotiated fnancing
*actoring accounts receivable
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Topic
(
Capital B%!geting an! E#timate! Ca#) Flow
Overvie, of capital budgeting process
(stimating project ;'fter"Te. incremental
operating cash 3o,s<
Capital &udgeting Techni0ues
1roject evaluation and selection: 'lternative
$ethods
4is- and $anagerial Options in Capital
&udgeting
&oo-
=
&oo-
>
Topic
*
Long+term Financing
Capital structure and cost of capital
Types of long"term debt instruments
&onds and their features
1referred stoc- and its features
Common stoc- and its features
6ual"class common stoc-
The "oans and "eases
?ong Term loans
$ortgage loan
%ubordinate
1rovisions of loan agreements
?ease *inancing and its reporting in fnancial
statements
?ease fnancing vs. debt fnancing
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Topic ,ivi!en! olic"
- 64I1s
*actor in3uencing dividend policies
%toc- dividend and stoc- split
%toc- repurchases
6ividend pay out policy.
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Topic
.
Leverage an! /%#ine## ri#k
Operating leverage
*inancial leverage
Total leverage
Other methods of analysis.
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0ecommen!e! Book#1
!=# *undamentals of fnancial $anagement !latest edition=@th# by
(ugene *. &righum, Aoel B. Bouston
!@# *undamentals of *inancial $anagement, &y Aames C. 7an Born
!># *inancial $anagement, &y ?a,rence A. Citman